Media Management and Economics Research in a Transmedia Environment

Alan B. Albarran

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135969417
• Edition: 1
• Topic: Filología
• Subtopic: Estudios de comunicación

First Published in 2013. This landmark work centers on media management and economics within a diverse, international, historical and constantly changing environment. The chapters herein reflect the current state of research and present directions for future study. Developed at the 2012 Research Symposium in conjunction with the annual convention of the Broadcast Education Association, it represents the most current theory and research in the area.

Section II

MME RESEARCH FROM JUNIOR SCHOLARS

4

APPLICATION OF THE LONG TAIL ECONOMY TO THE ONLINE NEWS MARKET IN TAIWAN

Civic Participation Matters

J. Sonia Huang , Ph.D. and Wei-Ching Wang , Ph.D.

The news industry as a whole is undergoing a transformation brought on by the emergence of digital technologies that have impacted all media. With audiences dispersing across ever more media outlets, nearly every media industry is losing popularity. Many news media have tried to redefine their appeal and their purpose (e.g., hyper-local or crowd-sourcing) based on the diminished capacity of each medium. For traditional media, the challenge is how to manage decline. However, in the case of Internet media, some doubt that Internet revenue will grow to the point where it can pay for journalism on the scale to which media are accustomed.

That is, even though the Internet has become the main news source for many and Internet advertising revenue grows over time (Interactive Advertising Bureau, 2011), the highest portion (28 percent) goes to search engines and Internet service providers rather than to news-related sectors such as newspaper websites (5 percent) or other news and current events sites (less than 3 percent) (Project for Excellence in Journalism, 2010). Moreover, general news online has become increasingly open to charging for at least part of its content as paywall experiments by pioneers like London's Times and The New York Times (Lefkow, 2011, May 17), but the fear that paywalls will result in a loss of traffic and of online advertising revenue is still omnipresent. The downward drift in profits has lately afflicted media publishers, as Gannett, A.H. Belo, Washington Post Company, and the New York Times Company all saw profits shrink in 2011 (Kaplan, 2011, July 28).

To explore alternative business models for news media's competitive market capacity, economic theories are applied in this chapter. As opposed to the conventional 80/20 principle, Anderson (2006) introduced The Long Tail: Why the Future of Business is Selling Less of More as an entirely new business model that showed how successful Internet businesses were expanding their tails to reach previously unreachable customers with the help of new information technologies. Anderson used Amazon.com as an example: about a quarter of Amazon's book sales came from outside its top 100,000 titles, around the number that the average brick and mortar bookstore carries. If the Amazon statistics are any guide, we wondered, is there a long-tail economy for the Internet media and to what extent can the online news sector be sustainable for a variety of players? Specifically, the authors seek to uncover a relationship between the long tail forces and the performance of the online news market in our home country—Taiwan, where dozens of national online news media compete for user attention.

The Online News Market in Taiwan

In the 1960s, McLuhan (1964) saw different media working together, while he predicted the attainment of a global village in which information and experience would be freely available for all to share. The idea of a global village became most explicit over the past two decades. There were no online news services in the world before 1993 but nowadays thousands of daily and non-daily newspapers (see onlinenewspapers.com) are available to interested users. In a similar vein, the first Taiwanese news site launched in September 1995, published by a major newspaper company, China Times Inc. Thereafter, most legacy news media established their online presences. A high-profile news site udn.com, affiliated with another major newspaper in Taiwan, United Daily News, went online in 1999 and surpassed China Times after four years of innovative operations such as monetization of all offline content produced by the United Daily News Co. since 1951 (see udndata.com). At the time of the study, more than a dozen Taiwan-based news sites had substantial market share but no one charged users a fee for news access; that is, all online news were offered to Taiwan's residents for free except for news archives.

With regard to market competition, news portals and newspaper sites have dominated Taiwan's online news market for years. News portals (e.g., Yahoo! Kimo News and MSN News) and newspaper sites (e.g., the online editions of the United Daily News and Apple Daily) have always been among the top 100 popular sites in Taiwan (Luo, Yang, & Zhao, 2011). However, news portals outperform most newspaper sites in audience share. According to an online news survey of 1,485 respondents, 79.6 percent of all Internet users obtained news from portal sites whereas only 18.1 percent accessed news directly from newspaper sites. More critically, a quarter of those who got news from portal sites did not visit newspaper sites at all (Brain.com, 2009). The online advertising revenue data also confirm this situation. Most of the Internet advertising revenue went to portals. For example, in 2008, the portal site advertising revenue accounted for 90.23 percent of the total online advertising revenue. The most successful portal Yahoo! Kimo earned 3.38 billion New Taiwan (NT) dollars; however, the most successful newspaper site, the United Daily News, only got 180 million NT dollars (see Table 4.1). The advertising profit of Yahoo! Kimo is 18.7 times higher than that of the United Daily News website. Beside portals, social media (e.g., Facebook and Google+) have also become critical players in news on the Internet. Social media's audience is vastly larger than any single news organization and their role has evolved from a network for friends to a way for people to share, recommend, and link together all kinds of information, including news (Nielsen Company and PEJ Research, 2011). Overall, the entry of a variety of players into the online news market in Taiwan in the past two decades brought about renewed competition which provides a unique context for the examination of a long tail economy.

The Long Tail Economy

Conventionally a business analysis would show that the Pareto Law or the 80/20 principle holds; i.e., 80 percent of total revenue will be generated from just 20 percent of the total product line (Koch, 1998). With rapid advances in Internet technologies and limitless space on the Internet, however, online news sites are currently able to offer audiences more segmented news and create more viewership niches; audiences and customers today also are increasingly favoring the media with the most choices (Li, 2001; Morton, 2004; Wicks, 1989). Drawing from Anderson's (2006) long tail model, the business that can offer more niche products is expected to be most successful. The long tail idea is based on several phenomena: the tail of available variety (i.e., the product line) is far longer than before and more extensive than we realize; the variety is now economically within reach of the average person due to the help of Internet technology; all of these niches, when aggregated, can make up a significant market share. None of the aforementioned phenomena can happen without a reduction in the cost of reaching niches. At least three powerful forces cause those costs to fall: democratization of the tools of production; democratization of the tools of distribution; and the connection of supply and demand. However, these forces were not newly

Table 4.1 Online Advertising Revenue in Taiwan

invented; the ideas are similar to some older concepts which communication scholars have talked about a lot. Anderson only systematically linked them together.

Democratization of Production Tools, Product Segmentation, and Civic Participation

The first force, democratizing the tools of production, has two implications: one is the incremental variety of products; the other is new producers in production (Anderson, 2006). When considering product variety, “In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly targeted goods and services can be as economically attractive as mainstream fare” (p. 52). The majority of relevant media studies consider such issues as the reasons for and the phenomenon of news “segmentation” on the radio or TV or in newspapers. They also examine online industries, mainly regarding consumer products, their product segmentation, and the industries' market performance (e.g., Li, 2001; Maynard, 1995; Wicks, 1989).

In addition to product segmentation, democratizing the tools of production promotes civic or public participation in content creation. Due to the incremental interactivity capacity of information technologies, today's online news websites can offer many more opportunities for the audience to interact with news providers, to participate in online news and content production, and also to personalize the channels and kinds of news that they prefer. There are several opportunities by which readers interact with news websites and participate in news processes (Briggs, 2007; ...

Table of contents

• Cover
• Half Title
• Electronic Media Research Series
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Notes on Contributors
• Series Editor's Foreword
• Introduction
• Section I Media Management and Economics Research from Senior Scholars
• Section II MME Research from Junior Scholars
• Section III Latin American and Hispanic MME Research
• Section IV Media Management Issues for New Media/Transmedia
• Index